The current renovation of the Eco10 portfolio , the index of quality ideas prepared by elEconomista.es with the collaboration of 50 analysis houses and calculated by Stoxx, is historic. Never before since the creation of the index on June 16, 2006 had there been five changes in the same review, that is, half of the selective. Thus, Solaria, Cellnex Telecom, CaixaBank, Acciona and BBVA will replace Banco Sabadell, Santander, ACS, CIE Automotive and IAG from September 16 at the end of the session, the day on which the new additions will become effective.
This changing of the guard is not accidental if the current market context is taken into account, where the cocktail of inflation, energy crisis and recession drums has led the orange indicator to drop close to 14% in the year, with closing data of August. Despite this setback, the Eco10 is 33 points higher than the Ibex 35 since its inception.
One factor that stands out in the composition of the new portfolio is the increase seen in the confidence of fifty analysts and managers who build the indicator on the Ibex 35 blue chips – with the exception of Santander, which is left out. Thus, Repsol, Inditex and Iberdrola are the three main positions after their weight has increased in all of them compared to the June review. In the specific case of the oil company, it has been the preferred value of the experts since September of last year.
Another feature of the new portfolio is the incorporation of the renewable bias –after the departure of Siemens Gamesa in December 2018– with the debut of Solaria in a context of crisis due to gas prices and energy transition and without forgetting that Acciona Energía is has been at the gates of debuting in the indicator. The one that does return is its parent company, Acciona, for the first time since its expulsion in March 2010.
In this way, the current composition of the selective is made up –following the weighting, from highest to lowest, given by the experts– by the following ten firms: Repsol, Inditex, Iberdrola, Grifols, Telefónica, Solaria, Cellnex, CaixaBank, Acciona and BBVA. However, within the portfolio their weight is evenly weighted, with 10% for each of them.
In general terms, the current portfolio offers an average upward potential of 34.4% for the coming months, compared to 32% for the Ibex 35, and a dividend yield of 4%. Of course, it is bought at a demanding multiplier, since it has a PER (number of times the profit is included in the share price) of 15 times, compared to the 10.4 times estimated for the Ibex 35. This This is mainly due to the inclusion of companies such as Acciona (22 times), Grifols (19.5 times), Inditex (17 times) and Iberdrola (16 times).
Six of the ten members have a buy recommendation from the FactSet consensus, while Acciona and Telefónica receive a hold and Solaria – one of the most bullish stocks so far this year, with more than 20% – charges with a sales tip.
In a complicated context for energy companies and with the European Union looking for ways to limit the impact of the high price of gas that households must assume, the solar company has recorded around 22% since January. “This vertiginous rise began after the outbreak of the war, where investors began to discount the need to invest in renewable energies so as not to depend on other countries in the future and achieve greater price stabilization,” they point out from XTB.
With this argument, CM Capital Markets has decided to keep the firm for another quarter in its portfolio. “Solaria should be favored by empowerment through a more favorable regulation of clean energy (solar) compared to fossil fuels, which are more polluting and affected by the war between Russia and Ukraine ,” says Jorge Lage, an analyst at the entity.
Not surprisingly, experts still give it a range of up to 21.41 euros per share. On the other hand, profit estimates reflect a growth of 38% for the 2022/2024 period. For this year alone, analysts have improved their forecast by 31% compared to what they expected at the beginning of January, and 23% for 2023.
Acciona has had to wait for more than a decade to become part of Eco10 again. Although in recent years the company’s action was penalized by the aspect of a family holding company that its holdings in businesses that are not related to energy gave it, the decision to take its renewables division public has catapulted the market not only to the subsidiary, but to the parent company itself, which adds up to nearly 20% in the year.
With its latest results, Acciona exceeded consensus forecasts for ebitda (gross profit) by 5%. “In addition to the improvement in the renewables division, construction activities also performed better than expected,” Barclays experts recall.
“Acciona’s history continues to be supported by a solid growth plan in renewables, an infrastructure portfolio at all-time highs and positive commercial activity in the real estate division,” highlights Aránzazu Bueno, an analyst at Bankinter.
Analysts still trust that its share will advance 5% more to 206.86 euros where they place its fair price.
The manager of telecommunications towers is an old acquaintance of the index and returns with the best recommendation of the entire Ibex 35 (see page 19). Her return coincides with her titles, noting losses close to 30% (she is one of the most bearish of the year) and falling 20 points from the European telecommunications sector. In this way, the firm can advance from current prices more than 67%, to 62.12 euros, in which the consensus sees it trading. Twelve investment banks see it above these levels, with target prices between 64 and 87 euros, with Insight Investment Research, Bestinver Securities and Berenberg as the most optimistic about its future performance. “Although the company’s attractive fundamentals now seem well appreciated,
With its latest accounts presented at the end of July, the teleco confirmed its outlook for the 2022 financial year with an EBITDA (gross profit) that would be between 2,650 and 2,700 million and in line with the FactSet? forecast of 2,671 million after have lowered it slightly, by 0.3%, compared to what was expected at the beginning of January. Of course, for 2023 and 2024, it places it at around 3,000 million euros.
BBVA and CaixaBank
The analysts and managers who help prepare the Eco10 portfolio have wanted to rotate exposure to the banking sector, dispensing with Santander and Sabadell and betting on two other titles for the autumn: CaixaBank, clearly the entity that has benefited the most from the rise in interest rates accelerates in the eurozone due to the high weight in its mortgage credit portfolio, and by BBVA, heavily penalized in recent months for its exposure to Turkey through Garanti.
“The sector should benefit from the rise in interest rates and the improvement in margins, although the increase in defaults and the economic downturn will also have a negative effect,” points out Jorge Lage, from CM Capital Markets. The already discounted rebound in defaults in the face of the escalation in prices that will affect mortgage holders and companies is the downside of the rate hike that is trying to chase down inflation. This same Thursday Christine Lagarde, president of the ECB, announced the largest increase in the history of the institution, of 75 basic points, and takes the official price of money in the euro zone to rates of 1.25%, levels not seen since 2011 .
CaixaBank has declared the greatest sensitivity on the interest margin. For each increase of 100 basic points, the entity calculates an improvement of 20% to 25% on this item of income. This represents some 1,700 million euros more interest margin. BBVA is the second that, in volume, will see its margin improve the most, above 700 million, with a declared sensitivity of between 15% and 20%.
So far this year, CaixaBank has once again become the most bullish value on the Ibex, with gains of more than 40%, thanks to the rise of more than 12% recorded in the last two sessions after the message much more Lagarde’s hawkish in which he anticipated more rises between now and the end of the year. Its PER stands at 8.3 times for 2023 and has an upward potential of 22% to 3.8 euros.
In the case of BBVA, it is no longer the most punished entity of the year (since it yields to Santander), with a fall of 8%. Its PER, at minimum, is around 5 times.